Guidewire Software is a provider of software for casualty and property insurance companies. The company’s products include a claims management system, a policy management system, and a cloud-based solution called Insurance Now. The company has reported solid results for multiple quarters and is benefitting from an overall cloud adoption momentum. Guidewire’s business model is based on recurring subscription revenues. The company seems to be well-positioned to benefit from the modernization of the property & casualty insurance industry and sustain long-term growth.

The monthly long-term chart for Guidewire shows a consistent uptrend for about five years, starting from 2016. Prices had remained within a clear channel throughout this period except for the pandemic-driven crash in March 2020, when the prices last broke the channel. More recently, prices fell by about 25% over the first three months of 2021. However, prices in April 2021 seem to be bouncing back up from close to the bottom of the longer-term trend. A long position currently offers an excellent risk-reward ratio. The likely target is $130 and can place a stop loss below the bottom trend line at around $95.

Position entered into our long-term tracking portfolio today. The entry point is at $104.76, and a stop-loss placed at $84.39, which is 19% below the entry point. The short-term to medium take profit at the top of the trend is set at $139.95, giving a gain of 34%.